Monday, January 26, 2009

Half of the world's people have access to microcredit

A new survey says that half of the world's people now have access to micro credit. Great news, but the group who conducted the survey warns the global economic crisis could slow the growth to more people.

The Microcredit Summit Campaign said its survey of micro-lenders showed more than 106 million of the very poorest received loans in 2007, helping them to set up and expand their businesses, reaching a target set in 1997 when fewer than 8 million were benefiting.Assuming each recipient was supporting four family members, that would mean some half a billion were being reached -- roughly half the nearly one billion people classed as living on less than $1.25 a day.

"You can be a beggar, you can be a prostitute -- there is still a way out of poverty," Ingrid Munro, founder of Kenyan microcredit organisation Jamii Bora, told a conference call.

Jamii Bora started in 1999 with loans to 50 beggars but now reaches 200,000 members. It has provided mortgages to help build a town of 2000 houses and 3000 business spaces.

"We are doing subprime lending but we are doing it right," said Munro.Beginning in the 1970s, microcredit has gained ground dramatically in recent years. Pionee Bangladeshi micro-finance institution Grameen Bank and its founder Muhammad Yunus won the Nobel Peace Prize in 2006.

"There are still many people we are not reaching," said Yunus. "We cannot stop now."The campaign's new target is to reach 175 million recipients by 2015 and move the income level of 100 million families above one dollar a day.